Posted on: 11 April 2022
As the owner or leader of a charity, you rely on your nonprofit designation to help keep you in business. Being able to receive donations or other sources of income without being subjected to the same tax laws as everyone else is key to your day-to-day operations. Protecting your nonprofit status then is, of course, of paramount importance. Whether you are new at charity work and need a helping hand with your bookkeeping or you've had issues with proper compliance in the past, here's why you might want to hire a nonprofit compliance expert to assist you.
They Can Help You Set Up a Code of Conduct for All Employees to Follow
Remaining in compliance with nonprofit regulations requires a team effort. Each employee of your nonprofit needs to be on the same page and make the right choices to protect the charity as a whole. In order to encourage good conduct, you can have a compliance expert take a look at your operation and point out possible conflicts of interest and even help you draft a new conduct policy to better manage employee behavior going forward.
They Can Look at Your Current Bookkeeping and Suggest Best Practices That Will Better Protect You
Proper nonprofit compliance requires outstanding documentation. Every penny you receive or spend needs to be notated with the reason behind the transaction. A compliance expert can offer some best industry practices that might help you run a tighter ship when it comes to properly documenting your finances. It's better to have a nonprofit compliance expert notice a red flag on your books than it is to have an auditor start asking questions about why you have something documented in the way that you do.
They Can Assist With the Taxes You Do Have to Pay For Unrelated Activities or Take a Look at Your Payroll Structure
A nonprofit compliance expert may not be a tax expert per se, but you will still need an accountant to go over your books every year. But a nonprofit compliance professional will be able to help you better identify which activities are related to the main purpose of your charity and which activities are considered unrelated from the government's point of view. This will help you better identify which activities or sources of income you will need to make sure you pay taxes on. In addition, if you intend to set up officers, directors, or other leadership positions for your charity, your compliance expert can help you structure your payroll in a way that will not raise any compliance flags.
For more information, contact a nonprofit compliance service in your area.Share